Survey Finds More Hosted Advisors Charge Fees

Host Agency Reviews has completed its 2020 Fee Survey, and for the first time, a majority of travel advisors reported charging a fee.

The findings show that advisors who specialized in FIT travel were most likely to charge a fee. Domestic air bookings were the most common type of service fee, and flat fees were the most common type of consultation fee.

Twenty-six percent of advisors charged service fees, and 10 percent charged a consultation fee. Sixteen percent reported charging both consultation and service fees, and the other 48 percent charged no fees.

Forty-two percent reported that they will consider charging a fee in the next 12 months.

The top four reasons to charge fees in 2020 were time and expertise, to weed out the “kickers,” selling no- or low-commission products and to stabilize income.

Eighty-three percent said that they charged a fee because their time and expertise are worth the money. Forty-seven percent charged a fee to weed out the “kickers, and 34 percent charged a fee for no- or low-commission products. Fifteen percent reported that they charged fees to stabilize income, something that could become important in a post-pandemic world.

“It’s important to note, this is pre-pandemic data,” said HAR’s founder, Stephanie Lee. “HAR will be monitoring how the COVID-19 crisis affects agencies’ fee-charging practices. Will the pandemic encourage more agencies to diversify their income through fees? It’s certainly a way to add some income stability.”

Lee will go over the results during a live webinar and Q&A with industry professionals on May 14 at 12 p.m. CST.

While the survey may have been conducted in a pre-COVID-19 world, the information can provide travel advisors who want to charge fees now a pathway to making the right choices.

Travelers will need more guidance in the future and that could take some time.

When it comes to consultation fees, 98 percent of travel advisors said that they charge a flat, one-time fee. Just two percent said they charged a flat fee per day.

Many advisors apply their consultation fees to their bookings. Sixty-eight percent said that they applied the full consultation fee to the booking. Twenty percent applied a certain dollar amount of the fee to the booking, and 12 percent applied a certain dollar amount to bookings.

Consultation fees can also be broken out in several ways.

Seventy-seven percent of advisors said they charged a flat fee. Eighteen percent charged a per-person flat fee, and three percent charged an hourly fee. Two percent of travel advisors said that the fee depends on the service.

Advisors selling certain niches in the industry are more likely to charge fees as well. Seventy-eight percent of advisors booking FIT travel charge a fee. Seventy percent of those booking groups charge for their services, and 68 percent for luxury bookings.

Sixty-four percent of advisors booking river cruises and 60 percent of destination specialists charge fees. Fifty-two percent of advisors specializing in honeymoons and weddings and family travel specialists charge fees.

Agents with less experience were less likely to charge fees. Just 29 percent of agents with less than a year of experience charged while 58 percent of advisors with more than 11 years charged for their services.

For travel advisors that don’t charge fees, the most frequent reason cited (33 percent) was that they might not be able to attract new clients or that they might lose clients.

Twenty-eight percent said that they don’t have enough experience, and 27 percent said that they didn’t want to.

Other reasons were because advisors didn’t know about charging, didn’t think it was right or fair or was against state law.

This survey was taken before COVID-19 so analysis on whether or not advisors plan to charge fees in the future could be different now. However, 13 percent said that they plan to charge fees in the next 12 months, and 42 percent said that they might. Forty-five percent said no.

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